2 december invoices totaling p39600 were entered in

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2. December invoices totaling P39,600 were entered in the voucher register in December, but the goods were not received until January. End of the Year 3. Sales of P129,000 (cost of P38,700) were made on account on December 31 and the goods delivered at that time, but all entries relating to the sales were made on January 2. 4. Invoices totaling P45,000 were entered in the voucher register in January, but the goods were received in December. 5. December invoices totaling P54,000 were entered in the voucher register in December, but the goods were not received until January. 6. Invoices totaling P36,000 were entered in the voucher register in January, and the goods were received in January, but the invoices were dated December. Page 16 1. What working paper adjustment should be made at the end of the current year for item no. 1? A. Purchases 75,000 Retained earnings 75,000 B. Retained earnings 75,000 Purchases 75,000 C. Inventory, beginning 75,000
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Purchases 75,000 D. No adjusting entry is necessary. 2. The working paper adjustment to correct the error described in item no. 3 should include a debit to A. Accounts receivable of P129,000 B. Sales of P129,000 C. Inventory of P38,700 D. Retained earnings of P90,300 3. The company’s statement of financial position as of the end of the current year should show inventory of A. P390,000 B. P300,000 C. P279,600 D. P351,300 4. What is the net adjustment to purchases of the current year? A. P81,000 increase B. P75,000 decrease C. P6,000 increase D. P6,000 decrease 5. The cost of goods sold for the current year is A. P4,683,600 B. P4,659,600 C. P4,740,000 D. P4,695,600 Page 17 PROBLEM NO. 10 – AUDIT OF VARIOUS WORKING CAPITAL ACCOUNTS The following accounts were included in the unadjusted trial balance of BUNCHING COMPANY as of December 31, 2018: Cash .............................................................................. P 963,200 Accounts receivable ....................................................... 2,254,000 Inventory ....................................................................... 6,050,000 Accounts payable ........................................................... 4,201,000 Accrued expenses ............................................................. 431,000
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During your audit, you noted that Bunching Company held its cash books open after year-end. In addition, your audit revealed the following: 1. Receipts for January 2019 of P654,600 were recorded in the December 2018 cash receipts book. The receipts of P360,100 represent cash sales and P294,500 represent collections from customers, net of 5% cash discounts. 2. Accounts payable of P372,400 was paid in January 2019. The payments, on which discounts of P12,400 were taken, were included in the December 2018 check register. 3. Merchandise inventory is valued at P6,050,000 prior to any adjustments. The following information has been found relating to certain inventory transactions: a. The invoice for goods costing P175,000 was received and recorded as a purchase on December 31, 2018. The related goods, shipped FOB destination, were received on January 4, 2019, and thus were not included in the physical inventory. b. A P182,000 shipment of goods to a customer on December 30, 2018, terms FOB destination, are not included in the year-end inventory. The goods cost P130,000 and were delivered to the customer on January 3, 2019. The sale was properly recorded in 2019.
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  • Summer '18
  • Jane
  • 1966, 1981, 1971

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